Aurobindo Pharmaceuticals is an India-based leading global generic company. It’s predominately formulations export company, with USA & Europe contributing ~70% of sales (FY2018). Amongst the Indian Pharmaceutical companies, we believe that Aurobindo Pharmaceuticals is well placed to face the challenging generic markets, given its focus on achieving growth through productivity.

Outlook and Valuation: We expect Aurobindo to report net revenue CAGR of ~13% & net profit to grow at ~5% CAGR during FY2018-20E, due to
increased R&D expenditure. However, valuations of the company are cheap v/s its peers and own fair multiples of 17-18x. We recommend BUY rating.

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